One World (OWOO) 10-Q 14 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 14, 2015
Document and Entity Information:
Entity Registrant Name	ONE WORLD HOLDINGS, INC.
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Entity Central Index Key	1,017,616
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Common Stock, Shares Outstanding		367,134,423
Trading Symbol	owoo

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)		Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash			$ 604
Accounts receivable		$ 1,191	9,140
Inventories		194,086	189,234
Prepaid consulting services		67,500	93,442
Prepaid expenses and other current assets		345,688	58,646
Total current assets		608,465	351,066
Long-term prepaid consulting services			22,500
Property and equipment, net		45,500	52,500
Other assets		2,701	2,701
Total		656,666	428,767
Current liabilities:
Accounts payable and accrued expenses		1,526,413	1,310,881
Accrued interest payable		429,355	277,264
Convertible debentures, net of discount		1,964,171	1,359,680
Derivative liability		19,969,377	2,718,652
Notes payable		563,828	120,328
Current portion of long-term debt, net of discount		27,625	22,598
Stockholder advances		470,484	569,439
Total current liabilities		24,951,253	6,378,842
Long-term debt, net of current portion and discount		14,352	9,800
Total liabilities		$ 24,965,605	$ 6,388,642
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized		$ 266	$ 266
Common stock; $0.0025 par value, 500,000,000 shares authorized, 338,162,089 and 170,767,039 shares issued and outstanding, respectively		845,405	426,918
Additional paid-in capital		10,639,478	10,274,683
Accumulated deficit		(35,794,088)	(16,661,742)
Total stockholders' deficit		(24,308,939)	(5,959,875)
Total Liabilities And Stockholders' Deficit		656,666	428,767
Series AA Preferred Stock
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized	[1]	80	80
Series BB Preferred Stock
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized	[2]	$ 186	$ 186
[1]	Series AA, 80,000 shares issued and outstanding
[2]	Series BB, 186,000 shares issued and outstanding

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Common Stock, par or stated value	$ 0.0025	$ 0.0025
Common Stock, shares authorized	500,000,000	500,000,000
Common Stock, shares issued	338,162,089	170,767,039
Common Stock, shares outstanding	338,162,089	170,767,039
Common Stock, unissued	0	0
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Series AA Preferred Stock
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, shares issued	80,000	80,000
Preferred Stock, shares outstanding	80,000	80,000
Preferred Stock, Shares Authorized	1,000,000
Series BB Preferred Stock
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, shares issued	186,000	186,000
Preferred Stock, shares outstanding	186,000	186,000
Preferred Stock, Shares Authorized	1,000,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement
Sales	$ 833	$ 26,875	$ 1,572	$ 29,168
Cost of sales	836	17,863	1,904	20,873
Gross margin (deficit)	(3)	9,012	(332)	8,295
Operating expenses:
Selling, general and administrative	451,550	2,486,507	943,373	3,032,278
Research and development	3,981	7,332	6,393	8,622
Depreciation	3,500	3,500	7,000	7,000
Total operating expenses	459,031	2,497,339	956,766	3,047,900
Loss from operations	(459,034)	(2,488,327)	(957,098)	(3,039,605)
Other income (expense):
Interest expense	(451,566)	(848,109)	(1,118,515)	(1,263,056)
Gain (loss) on derivative liability	(7,126,383)	(6,987)	(17,068,588)	159,093
Gain (loss) on debt settlement	31,616	(583,971)	11,855	(538,141)
Total other expense	(7,546,333)	(1,439,067)	(18,175,248)	(1,642,104)
Loss before income taxes	$ (8,005,367)	$ (3,927,394)	$ (19,132,346)	$ (4,681,709)
Provision for income taxes
Net loss	$ (8,005,367)	$ (3,927,394)	$ (19,132,346)	$ (4,681,709)
Net loss per common share - basic and diluted	$ (0.03)	$ (0.16)	$ (0.08)	$ (0.36)
Weighted average number of common shares outstanding - basic and diluted	279,277,078	24,365,186	253,103,538	12,970,226

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (19,132,346)	$ (4,681,709)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	7,000	7,000
Amortization of debt discount to interest expense	808,293	700,873
Interest expense added to stockholder advances	28,460
Preferred stock issued for services		80
Common stock issued for services	2,400	1,500
Warrants issued for interest expense		394,860
Stock options issued for services		240,000
Notes payable issued for services		35,000
(Gain) loss on derivative liability	17,068,588	(159,093)
(Gain) loss on debt settlement	(11,855)	538,141
Changes in operating assets and liabilities:
Accounts receivable	7,949
Inventories	(4,852)	8,939
Prepaid consulting services	48,442	1,934,483
Prepaid expenses and other current assets	(287,042)	12,648
Accounts payable and accrued expenses	215,532	295,647
Accrued interest payable	165,585	94,993
Net cash used in operating activities	$ (1,083,846)	$ (576,638)
Cash flows from investing activities
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from convertible debentures	$ 853,547	$ 607,532
Proceeds from notes payable	468,500	25,000
Proceeds from stockholder advances	15,000	10,000
Payments on convertible debentures	(214,850)	(67,233)
Payments on notes payable	(25,000)	(5,000)
Payments on stockholder advances	(13,955)
Net cash provided by financing activities	1,083,242	570,299
Net decrease in cash	(604)	(6,339)
Cash, beginning of the period	$ 604	6,456
Cash, end of the period		$ 117

Note 1 - Description of Busines

Note 1 - Description of Business and Basis of Financial Statement Presentation	6 Months Ended
	Jun. 30, 2015
Notes
Note 1 - Description of Business and Basis of Financial Statement Presentation	NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF FINANCIAL STATEMENT PRESENTATION Organization, Nature of Business One World Holdings, Inc. (the "Company"), a Nevada Corporation, is a Houston-based company focused on doll design and marketing. Substantially all of the Company's operations are conducted through its wholly owned subsidiary, The One World Doll Project, Inc. (a Texas Corporation - "OWDPI"). OWDPI began operations on October 1, 2010, and on January 14, 2011, OWDPI was incorporated in the State of Texas. The accompanying consolidated financial statements are presented as if OWDPI was a corporation from inception. National Fuel and Energy, Inc. (a Texas Corporation) is a wholly owned subsidiary of the Company that has been dormant since its inception on October 1, 2010. Additionally, on July 21, 2011, we completed a reverse merger whereby OWDPI was recapitalized and became the reporting entity for accounting purposes. In October 2013, we received our first shipment of dolls from our manufacturer and commenced sales of dolls. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, OWDPI and National Fuel and Energy, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. Interim Financial Information The interim financial information of the Company as of June 30, 2015 and for the three months and six months ended June 30, 2015 is unaudited, and the balance sheet as of December 31, 2014 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months and six months ended June 30, 2015 are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2015. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014. Certain amounts in the condensed consolidated financial statements for the three months and six ended June 30, 2014 have been reclassified to conform to the current year presentation.

Note 2 - Going Concern

Note 2 - Going Concern	6 Months Ended
	Jun. 30, 2015
Notes
Note 2 - Going Concern	NOTE 2 – GOING CONCERN The Company has incurred operating losses since inception, has only minimal sales of its dolls, and has limited financial resources and a working capital deficit of $24,342,788 at June 30, 2015. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In addition, the Company had an accumulated deficit of $35,794,088 and a total stockholders’ deficit of $24,308,939 at June 30, 2015. The working capital deficit, accumulated deficit and total stockholders’ deficit resulted primarily from the significant derivative liability and debt recorded at June 30, 2015. The Company's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and, ultimately, achieve profitable operations. Management’s plans to address the Company’s continuing existence include obtaining debt or equity funding from private or institutional sources or obtaining loans from financial institutions and individuals, where possible. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 3 - Fair Value of Financia

Note 3 - Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2015
Notes
Note 3 - Fair Value of Financial Instruments	NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2015 and December 31, 2014, we believe the amounts reported for cash, accounts payable and accrued expenses, accrued interest payable, and notes payable approximate fair value because of the short-term nature of these financial instruments. We adopted ASC Topic 820 (originally issued as SFAS 157, “Fair Value Measurements”) for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: · Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Liabilities measured at fair value on a recurring basis are as follows at June 30, 2015: Total Level 1 Level 2 Level 3 Derivative liability $19,969,377 $- $- $19,969,377 Convertible debentures 1,964,171 - - 1,964,171 Current portion of long-term debt 27,625 - - 27,625 Long-term debt, net of current portion 14,352 - - 14,352 Total liabilities measured at fair value $21,975,525 $- $- $21,975,525

Note 4 - Income (loss) Per Shar

Note 4 - Income (loss) Per Share	6 Months Ended
	Jun. 30, 2015
Notes
Note 4 - Income (loss) Per Share	NOTE 4 – INCOME (LOSS) PER SHARE The computation of basic income (loss) per common share is based on the weighted average number of shares outstanding during each period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the common stock equivalents that would arise from the exercise of stock options and warrants outstanding, using the treasury stock method and the average market price per share during the period. Common stock equivalents are not included in the diluted loss per share calculation when their effect is anti-dilutive. Since we had no dilutive effect of stock options and warrants for the three months and six months ended June 30, 2015 and 2014, our basic weighted average number of common shares outstanding is the same as our diluted weighted average number of common shares outstanding. At June 30, 2015, we had outstanding stock options and warrants for a total of 4,977,267 shares of common stock that would have a potential dilutive effect on our calculation of income (loss) per share.

Note 5 - Convertible Debentures

Note 5 - Convertible Debentures and Derivative Liability	6 Months Ended
	Jun. 30, 2015
Notes
Note 5 - Convertible Debentures and Derivative Liability	NOTE 5 – CONVERTIBLE DEBENTURES AND DERIVATIVE LIABILITY Through June 30, 2015, we have financed our operations primarily through the issuance of various convertible debentures. For the six months ended June 30, 2015, we received cash proceeds of $853,547 from the issuance of new convertible debentures. We also issued a new convertible debenture with the transfer of $128,460 from stockholder advances. The debentures are generally unsecured and bear interest ranging from 6% to 22% per annum, with maturities ranging from two months to two years. The outstanding principal and accrued interest of the debentures are convertible into shares of the Company’s common stock at a fixed conversion price ranging from $0.0025 to $30.00 per share or variable discounted pricing based on the market price of the Company’s common stock as defined in the debt agreement. We evaluated the convertible debentures in accordance with ASC Topic 815, “Derivatives and Hedging,” and determined that the conversion feature of the convertible promissory notes with variable conversion prices were not afforded the exemption for conventional convertible instruments due to their variable conversion rates. The notes have no explicit limit on the number of shares issuable so they did not meet the conditions set forth in current accounting standards for equity classification. We elected to recognize the notes under paragraph 815-15-25-4, whereby there would be a separation into a host contract and derivative instrument. We elected to initially and subsequently measure the notes in their entirety at fair value, with changes in fair value recognized in earnings. We recorded a derivative liability and debt discount representing the imputed interest associated with the embedded derivative. For those convertible debentures with fixed conversion prices, we recorded a beneficial conversion feature at the inception of the debt to additional paid-in capital and to debt discount where the conversion price was less that the market price of the stock. The debt discount is amortized over the life of the note and recognized as interest expense. For the six months ended June 30, 2015 and 2014, we amortized debt discount of $808,293 and $700,873, respectively, to interest expense. The derivative liability is adjusted periodically according to the stock price fluctuations and other inputs and was $19,969,377 and $2,718,652 at June 30, 2015 and December 31, 2014, respectively. For purpose of estimating the fair value of the convertible debentures, we used the Black Scholes option valuation model. At June 30, 2015, the convertible debentures and related accrued interest payable were convertible into approximately 2,514,516,000 shares of our common stock. Based on the assumptions used to estimate the fair value of the derivative liability at June 30, 2015 and assuming all lenders convert the notes payable at the June 30, 2015 conversion prices, the Company would have insufficient authorized shares of common stock to complete the debt conversions. As of June 30, 2015, several of the convertible debentures are delinquent. We believe we have good relationships with most debenture holders, and continue to have discussions with them regarding the extension of maturity dates or settlement of amounts due. For purpose of determining the fair market value of the derivative liability, we used the Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative liability at June 30, 2015 are as follows: Stock price on the valuation date $0.0083 Conversion price for the debt $0.00025- $0.0062 Dividend yield 0.00% Years to maturity 0.25 - 1.18 Risk free rate 0.01% - 0.28% Expected volatility 289.97% - 405.02% These assumptions are subject to significant changes and market fluctuations from period to period; therefore, the estimated fair value of the derivative liability will fluctuate from period to period and the fluctuation may be material. During the six months ended June 30, 2015, the Company had the following activity in its derivative liability account: Derivative liability at December 31, 2014 $2,718,652 Addition to liability for new debt issued 812,321 Elimination of liability on conversion (630,184) Change in fair value 17,068,588 Derivative liability at June 30, 2015 $19,969,377

Note 6 - Notes Payable

Note 6 - Notes Payable	6 Months Ended
	Jun. 30, 2015
Notes
Note 6 - Notes Payable	NOTE 6 – NOTES PAYABLE As of June 30, 2015, we had short-term notes payable to certain individuals or companies totalling $563,828. These notes are unsecured, payable to non-related parties and bear interest at rates ranging from 0% to 16% per annum.

Note 7 - Stockholder Advances

Note 7 - Stockholder Advances	6 Months Ended
	Jun. 30, 2015
Notes
Note 7 - Stockholder Advances	NOTE 7 – STOCKHOLDER ADVANCES Since the inception of the Company, we have relied on cash advances from certain stockholders to fund our operations. These advances generally have no specified repayment terms and no stated rate of interest. All advances are considered by us to be due on demand until such time as the advances are converted into notes payable, issuances of shares of our common stock or other formal repayment arrangements. At June 30, 2015, stockholder advances totalled $470,484.

Note 8 - Long-term Debt

Note 8 - Long-term Debt	6 Months Ended
	Jun. 30, 2015
Notes
Note 8 - Long-term Debt	NOTE 8 – LONG-TERM DEBT Our long-term debt consisted of the following at June 30, 2015: Long-term convertible debentures, net of discount of $23,818 (see Note 5) $13,702 Long-term note payable, net of discount of $1,725 28,275 Total 41,977 Current portion 27,625 Long-term debt $14,352 The long-term note payable is an unsecured note payable of $30,000 to an individual due July 30, 2016, with interest at 14% per annum. Payment terms for the note payable are $350 per month for six months and $698 per month for sixty months, including interest. We are in default on the note payable at June 30, 2015 due to our failure to make timely payments in accordance with the terms of the note agreement.

Note 9 - Stockholders' Deficit

Note 9 - Stockholders' Deficit	6 Months Ended
	Jun. 30, 2015
Notes
Note 9 - Stockholders' Deficit	NOTE 9 – STOCKHOLDERS’ DEFICIT We currently have 10,000,000 shares of $0.001 par value preferred stock authorized and 500,000,000 shares of $0.0025 par value common stock authorized. We have authorized the issuance of up to 1,000,000 shares of Series AA Preferred Stock. Among other things, the Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company’s common stock held by such holders of Series AA Preferred Stock. The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference. In June 2014, 20,000 shares of Series AA Preferred Stock were issued to each of the four members of the Company’s Board of Directors. We have also authorized the issuance of up to 1,000,000 shares of Series BB Preferred Stock. Among other things, the Series BB Preferred Stock allows holders thereof voting rights equal to holders of common stock as a single class with respect to all matters submitted to holders of common stock, quarterly dividends payable in arrears in either cash or in kind, liquidation preferences, and is convertible at the option of the holder into 50 shares of common stock of the Company. In August 2014, a total of 186,000 shares of Series BB Preferred Stock was issued to two officers and one of our founders upon their surrender of a total of 9,300,000 shares of common stock. During the six months ended June 30, 2015, we issued a total of 167,395,050 shares of our common stock with a total value of $711,522 for conversion of debt. As of June 30, 2015, we had several convertible debentures and related accrued interest payable that were convertible into approximately 2,514,516,000 shares of our common stock. We had 500,000,000 common shares authorized and 338,162,089 common shares issued and outstanding. We will be required to increase the number of authorized shares of common stock in the event all convertible debt is converted into shares of our common stock.

Note 10 - Stock Options and War

Note 10 - Stock Options and Warrants	6 Months Ended
	Jun. 30, 2015
Notes
Note 10 - Stock Options and Warrants	NOTE 10 – STOCK OPTIONS AND WARRANTS During the six months ended June 30, 2015, we did not issue any new stock options or warrants. The following table summarizes the stock option and warrant activity during the six months ended June 30, 2015: Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Outstanding at December 31, 2014 4,977,267 $0.03 Granted - Exercised - Expired or cancelled - Outstanding, vested and exercisable at June 30, 2015 4,977,267 $0.03 3.75 In May 2014, the Board of Directors of the Company adopted and approved the One World Holdings Inc. 2014 Stock Option and Stock Award Plan (the “Plan”). Also, the holders of a majority of the Company’s outstanding common stock voted to approve and authorize adoption of the Plan. A total of 2,000,000 shares of our common stock are available for issuance under the Plan. Under the Plan, we may issue options, including incentive stock options and non-statutory stock options, restricted stock grants, or stock appreciation rights. Awards under the Plan may be granted to employees, consultants, directors and individuals who meet the requirements defined in the Plan.

Note 11 - Prepaid Consulting Se

Note 11 - Prepaid Consulting Services	6 Months Ended
	Jun. 30, 2015
Notes
Note 11 - Prepaid Consulting Services	NOTE 11 – PREPAID CONSULTING SERVICES We have entered into various consulting agreements for financial and business development services to the Company, including agreements with our officers and directors. Certain of these consulting agreements provide for cash compensation to the consultants; however, most are based on issuances of shares of our common stock in exchange for services. Under the consulting agreements that provide for share issuances, shares were generally issued at the inception of the agreements for services provided. There generally are no specified performance requirements and no provision in the agreements for return of the shares. During the three months and six months ended June 30, 2015, total compensation expense paid in common shares was $22,500 and $48,442, respectively. Compensation expense is calculated based on the market price of the stock on the effective date of agreement and amortized over the period over which the services are provided to the Company. As of June 30, 2015, the unamortized compensation was $67,500 reported as a current asset, prepaid consulting services, on our condensed consolidated balance sheet.

Note 12- Related Party Transact

Note 12- Related Party Transactions	6 Months Ended
	Jun. 30, 2015
Notes
Note 12- Related Party Transactions	NOTE 12– RELATED PARTY TRANSACTIONS Several of the consulting agreements discussed in Note 11 are with related parties. Related parties consist primarily of our executive officers, directors and individuals affiliated through family relationships with our officers and directors. There was no compensation expense paid in common shares to related parties during the six months ended June 30, 2015. In addition to compensation expense paid in stock, we had the following amounts paid for consulting and professional fees to related parties during the six months ended June 30, 2015: Founder, stockholder $82,658 Family of officers and directors 54,439 Total related parties $137,097 As of June 30, 2015, we had convertible debentures of $5,000, $46,600 and $8,000, which are further discussed in Note 5, payable to three family members of our executive officers. The outstanding principal and interest are convertible into shares of our common stock at a conversion prices ranging from $0.01 to $30 per share. Accrued interest payable to these related parties totaled $21,599 at June 30, 2015. As of June 30, 2015, we had stockholder advances payable to related parties totaling $90,164.

Note 13 - Supplemental Statemen

Note 13 - Supplemental Statement of Cash Flows Information	6 Months Ended
	Jun. 30, 2015
Notes
Note 13 - Supplemental Statement of Cash Flows Information	NOTE 13 – SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION During the six months ended June 30, 2015, we made no cash payments for income taxes. During the six months ended June 30, 2015, we made cash payments for interest totaling $78,552. During the six months ended June 30, 2015, we had the following non-cash financing and investing activities: · Increased additional paid-in capital and debt discount by $71,760 for beneficial conversion feature of convertible notes payable. · Increased debt discount and derivative liability by $812,321. · Decreased stockholder advances and increased convertible debentures by $128,460. · Decreased accrued interest payable by $11,547, decreased convertible debentures by $127,085, decreased debt discount by $47,839, decreased derivative liability by $630,184, increased common stock by $418,487 and increased additional paid-in capital by $293,035 for common shares issued in conversion of debt. · Decreased accrued interest payable by $1,947 and increased convertible debentures by $1,947.

Note 14 - Recent Accounting Pro

Note 14 - Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2015
Notes
Note 14 - Recent Accounting Pronouncements	NOTE 14 – RECENT ACCOUNTING PRONOUNCEMENTS In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330), Simplifying the Measurement of Inventory.” An entity is required to measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Other than the change in the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value for inventory within the scope of this Update, there are no other substantive changes to the guidance on measurement of inventory. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in this Update are to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement. In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs.” To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public companies, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted for financial statements that have not been previously issued. We are currently unable to determine the impact on our consolidated financial statements of the adoption of this new accounting pronouncement.

Note 15 - Contingencies

Note 15 - Contingencies	6 Months Ended
	Jun. 30, 2015
Notes
Note 15 - Contingencies	NOTE 15 – CONTINGENCIES From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business, including claims relating to our past due debt. Management, along with the assistance of counsel, will determine the ultimate disposition and potential impact of these matters on our financial condition, liquidity or results of operations. On November 4, 2014, we were named as a defendant in a civil lawsuit filed by Darling Capital, LLC, (“Darling”) a creditor of ours, in the New York Supreme Court, County of New York. The plaintiff filed a Motion For Summary Judgment in Lieu of Complaint the same day. The plaintiff alleges, among other things, that we defaulted on our obligations under a Convertible Promissory Note held by Darling. The complaint seeks, among other relief, judgment against us in the amount of $57,627. We are currently negotiating a settlement with Darling that is in the best interest of both parties. On or about February 19, 2015, Gel Properties, LLC (“Gel”) filed a complaint against the Company in the United States District Court, Southern District of New York alleging, among other things, breach of contract, anticipatory breach and conversion relating to a convertible promissory note in the original principal amount of $50,000. Following various hearings, on May 12, 2015, Gel and the Company entered into a stipulation and agreement of settlement, which agreement was filed with the court, whereby the Company agreed to pay Gel the sum of $98,000. The settlement agreement allows for three payments with the first payment due May 21, 2015 and the final payment of $33,000 due on August 13, 2015. The Company is current on the payments and plans to make the final payment in compliance with the terms of the settlement agreement. On February 11, 2015, LG Capital Funding, LLC filed a complaint against the Company in the United States District Court, Eastern District of New York alleging breach of contract, anticipatory breach of contract and conversion relating to three convertible promissory notes totaling approximately $186,158 in principal and accrued interest. Following various hearings, on August 7, 2015, the Company was ordered by the court to pay $296,086 in settlement for breach of contract on the three convertible promissory notes. We are in the process of responding to this order and intend to vigorously defend our interests.

Note 16 - Subsequent Events

Note 16 - Subsequent Events	6 Months Ended
	Jun. 30, 2015
Notes
Note 16 - Subsequent Events	NOTE 16 – SUBSEQUENT EVENTS To fund our operations subsequent to June 30, 2015, we incurred additional indebtedness totaling $213,500, consisting of proceeds from convertible debentures totaling $121,000 and proceeds from short-term notes payable totaling $92,500. Subsequent to June 30, 2015, we issued a total of 28,972,334 shares of our common stock for debt conversions of $35,100 principal and $2,926 accrued interest payable.

Note 1 - Description of Busin22

Note 1 - Description of Business and Basis of Financial Statement Presentation (Policies)	6 Months Ended
	Jun. 30, 2015
Policies
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, OWDPI and National Fuel and Energy, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

Note 3 - Fair Value of Financ23

Note 3 - Fair Value of Financial Instruments: Fair Value, Liabilities Measured on Recurring Basis (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Fair Value, Liabilities Measured on Recurring Basis	Liabilities measured at fair value on a recurring basis are as follows at June 30, 2015: Total Level 1 Level 2 Level 3 Derivative liability $19,969,377 $- $- $19,969,377 Convertible debentures 1,964,171 - - 1,964,171 Current portion of long-term debt 27,625 - - 27,625 Long-term debt, net of current portion 14,352 - - 14,352 Total liabilities measured at fair value $21,975,525 $- $- $21,975,525

Note 5 - Convertible Debentur24

Note 5 - Convertible Debentures and Derivative Liability: Fair Value, Measurement Inputs, Disclosure (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Fair Value, Measurement Inputs, Disclosure	For purpose of determining the fair market value of the derivative liability, we used the Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative liability at June 30, 2015 are as follows: Stock price on the valuation date $0.0083 Conversion price for the debt $0.00025- $0.0062 Dividend yield 0.00% Years to maturity 0.25 - 1.18 Risk free rate 0.01% - 0.28% Expected volatility 289.97% - 405.02%

Note 5 - Convertible Debentur25

Note 5 - Convertible Debentures and Derivative Liability: Schedule of Derivative Liabilities (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Schedule of Derivative Liabilities	These assumptions are subject to significant changes and market fluctuations from period to period; therefore, the estimated fair value of the derivative liability will fluctuate from period to period and the fluctuation may be material. During the six months ended June 30, 2015, the Company had the following activity in its derivative liability account: Derivative liability at December 31, 2014 $2,718,652 Addition to liability for new debt issued 812,321 Elimination of liability on conversion (630,184) Change in fair value 17,068,588 Derivative liability at June 30, 2015 $19,969,377

Note 8 - Long-term Debt_ Schedu

Note 8 - Long-term Debt: Schedule of Long-term Debt (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Schedule of Long-term Debt	Our long-term debt consisted of the following at June 30, 2015: Long-term convertible debentures, net of discount of $23,818 (see Note 5) $13,702 Long-term note payable, net of discount of $1,725 28,275 Total 41,977 Current portion 27,625 Long-term debt $14,352

Note 10 - Stock Options and W27

Note 10 - Stock Options and Warrants: Schedule of Stock Option and Warrant, Activity (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Schedule of Stock Option and Warrant, Activity	The following table summarizes the stock option and warrant activity during the six months ended June 30, 2015: Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Outstanding at December 31, 2014 4,977,267 $0.03 Granted - Exercised - Expired or cancelled - Outstanding, vested and exercisable at June 30, 2015 4,977,267 $0.03 3.75

Note 12- Related Party Transa28

Note 12- Related Party Transactions: Schedule of Related Party Compensation Expense (Tables)	6 Months Ended
	Jun. 30, 2015
Tables/Schedules
Schedule of Related Party Compensation Expense	In addition to compensation expense paid in stock, we had the following amounts paid for consulting and professional fees to related parties during the six months ended June 30, 2015: Founder, stockholder $82,658 Family of officers and directors 54,439 Total related parties $137,097

Note 2 - Going Concern (Details

Note 2 - Going Concern (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Details
Working Capital Deficit	$ (24,342,788)
Accumulated deficit	(35,794,088)	$ (16,661,742)
Total stockholders' deficit	$ (24,308,939)	$ (5,959,875)

Note 3 - Fair Value of Financ30

Note 3 - Fair Value of Financial Instruments: Fair Value, Liabilities Measured on Recurring Basis (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Derivative liability	$ 19,969,377	$ 2,718,652
Convertible debentures	1,964,171	1,359,680
Current portion of long-term debt	27,625	22,598
Long-term debt, net of current portion	14,352	$ 9,800
Total liabilities measured at fair value	21,975,525
Fair Value, Inputs, Level 1
Derivative liability	0
Convertible debentures	0
Current portion of long-term debt	0
Long-term debt, net of current portion	0
Total liabilities measured at fair value	0
Fair Value, Inputs, Level 2
Derivative liability	0
Convertible debentures	0
Current portion of long-term debt	0
Long-term debt, net of current portion	0
Total liabilities measured at fair value	0
Fair Value, Inputs, Level 3
Derivative liability	19,969,377
Convertible debentures	1,964,171
Current portion of long-term debt	27,625
Long-term debt, net of current portion	14,352
Total liabilities measured at fair value	$ 21,975,525

Note 4 - Income (loss) Per Sh31

Note 4 - Income (loss) Per Share (Details)	6 Months Ended
	Jun. 30, 2015shares
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,977,267

Note 5 - Convertible Debentur32

Note 5 - Convertible Debentures and Derivative Liability (Details)	6 Months Ended
	Jun. 30, 2015USD ($)$ / shares	Jun. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Proceeds from convertible debentures	$ 853,547	$ 607,532
Amortization of debt discount to interest expense	808,293	$ 700,873
Derivative liability	$ 19,969,377		$ 2,718,652
Common Stock
Debt Instrument, Convertible, Number of Equity Instruments	2,514,516,000
Convertible debentures
Proceeds from convertible debentures	$ 853,547
Convertible debentures | Minimum
Interest Rate	6.00%
Debt Instrument, Term	2 months
Conversion Price | $ / shares	$ 0.0025
Convertible debentures | Maximum
Interest Rate	22.00%
Debt Instrument, Term	2 years
Conversion Price | $ / shares	$ 30
Convertible debentures | Transfer From Stockholder Advances
Debt Conversion, Converted Instrument, Amount	$ 128,460

Note 5 - Convertible Debentur33

Note 5 - Convertible Debentures and Derivative Liability: Fair Value, Measurement Inputs, Disclosure (Details) - Jun. 30, 2015 - $ / shares	Total
Fair Value Measurements, Valuation Techniques	Black Scholes option valuation model
Stock price on the valuation date	$ 0.0083
Dividend yield	0.00%
Minimum
Conversion price for the debt	$ 0.00025
Years to maturity	3 months
Risk free rate	0.01%
Expected volatility	289.97%
Maximum
Conversion price for the debt	$ 0.0062
Years to maturity	1 year 2 months 5 days
Risk free rate	0.28%
Expected volatility	405.02%

Note 5 - Convertible Debentur34

Note 5 - Convertible Debentures and Derivative Liability: Schedule of Derivative Liabilities (Details)	6 Months Ended
	Jun. 30, 2015USD ($)
Details
Derivative liability, beginning balance	$ 2,718,652
Addition to liability for new debt issued	812,321
Elimination of liability on conversion	(630,184)
Change in fair value	17,068,588
Derivative liability, ending balance	$ 19,969,377

Note 6 - Notes Payable (Details

Note 6 - Notes Payable (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Notes payable	$ 563,828	$ 120,328
Note Payable | Minimum
Interest Rate	0.00%
Note Payable | Maximum
Interest Rate	16.00%

Note 7 - Stockholder Advances (

Note 7 - Stockholder Advances (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Details
Stockholder advances	$ 470,484	$ 569,439

Note 8 - Long-term Debt_ Sche37

Note 8 - Long-term Debt: Schedule of Long-term Debt (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Long-term convertible debentures, net of discount of $23,818 (see Note 5)	$ 13,702
Long-term note payable, net of discount of $1,725	28,275
Total	41,977
Current portion	27,625	$ 22,598
Long-term debt	14,352	$ 9,800
Long-term Convertible Debentures
Less discount	23,818
Long-term note payable
Less discount	$ 1,725

Note 8 - Long-term Debt (Detail

Note 8 - Long-term Debt (Details) - Jun. 30, 2015 - Long-term note payable - USD ($)	Total
Original Principal Amount	$ 30,000
Debt Instrument, Maturity Date	Jul. 30, 2016
Interest Rate	14.00%
Debt Instrument, Payment Terms	Payment terms for the note payable are $350 per month for six months and $698 per month for sixty months, including interest.

Note 9 - Stockholders' Deficit

Note 9 - Stockholders' Deficit (Details)	1 Months Ended		6 Months Ended
	Aug. 30, 2014shares	Jun. 30, 2014shares	Jun. 30, 2015USD ($)$ / sharesshares	Dec. 31, 2014$ / sharesshares
Preferred Stock, Shares Authorized			10,000,000	10,000,000
Preferred Stock, Par Value | $ / shares			$ 0.001	$ 0.001
Common Stock, shares authorized			500,000,000	500,000,000
Common Stock, par or stated value | $ / shares			$ 0.0025	$ 0.0025
Debt Conversion, Original Debt, Amount | $			$ 711,522
Common Stock, shares issued			338,162,089	170,767,039
Common Stock
Conversion of Stock, Shares Converted	9,300,000
Debt Conversion, Converted Instrument, Shares Issued			167,395,050
Debt Instrument, Convertible, Number of Equity Instruments			2,514,516,000
Series AA Preferred Stock
Preferred Stock, Shares Authorized			1,000,000
Preferred Stock, Par Value | $ / shares			$ 0.001	$ 0.001
Preferred Stock, Terms			Series AA Preferred Stock allows holders thereof enhanced voting rights based on ten thousand (10,000) votes per share of the Company’s common stock held by such holders of Series AA Preferred Stock. The Series AA Preferred Stock is not convertible into common stock, does not pay dividends, and does not include a liquidation preference
Stock Issued During Period, Shares, New Issues		20,000
Series BB Preferred Stock
Preferred Stock, Shares Authorized			1,000,000
Preferred Stock, Par Value | $ / shares			$ 0.001	$ 0.001
Preferred Stock, Terms			convertible at the option of the holder into 50 shares of common stock of the Company
Shares of Preferred Stock in Exchange for Common Stock	186,000

Note 10 - Stock Options and W40

Note 10 - Stock Options and Warrants: Schedule of Stock Option and Warrant, Activity (Details) - 6 months ended Jun. 30, 2015 - Stock Options and Warrants - $ / shares	Total
Outstanding, Beginning Balance	4,977,267
Outstanding, Vested and Exercisable, Weighted Average Exercise Price, Beginning Balance	$ 0.03
Granted	0
Exercised	0
Expired or cancelled	0
Outstanding, Vested and Exercisable, Ending Balance	4,977,267
Outstanding, Vested and Exercisable, Weighted Average Exercise Price, Ending Balance	$ 0.03
Outstanding, Vested and Exercisable, Weighted Average Remaining Term in Years	3 years 9 months

Note 10 - Stock Options and W41

Note 10 - Stock Options and Warrants (Details)	Jun. 30, 2015shares
Stock Options and Warrants
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2,000,000

Note 11 - Prepaid Consulting 42

Note 11 - Prepaid Consulting Services (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Allocated Share-based Compensation Expense	$ 22,500
Prepaid consulting services	67,500	$ 67,500	$ 93,442
Consulting Agreements
Allocated Share-based Compensation Expense		48,442
Prepaid consulting services	$ 67,500	$ 67,500

Note 12- Related Party Transa43

Note 12- Related Party Transactions: Schedule of Related Party Compensation Expense (Details)	6 Months Ended
	Jun. 30, 2015USD ($)
Professional Fees	$ 137,097
Founder, stockholder
Professional Fees	82,658
Family of officers and directors
Professional Fees	$ 54,439

Note 12- Related Party Transa44

Note 12- Related Party Transactions (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accrued interest payable	$ 429,355	$ 277,264
Stockholder advances	$ 470,484	$ 569,439
Convertible debentures | Minimum
Conversion Price	$ 0.0025
Convertible debentures | Maximum
Conversion Price	$ 30
Family member of Executive Officers 1
Original Principal Amount	$ 5,000
Family member of Executive Officers 2
Original Principal Amount	46,600
Family member of Executive Officers 3
Original Principal Amount	8,000
Family of officers and directors
Stockholder advances	90,164
Family of officers and directors | Convertible debentures
Accrued interest payable	$ 21,599
Family of officers and directors | Convertible debentures | Minimum
Conversion Price	$ 0.01
Family of officers and directors | Convertible debentures | Maximum
Conversion Price	$ 30

Note 13 - Supplemental Statem45

Note 13 - Supplemental Statement of Cash Flows Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Income Taxes Paid	$ 0
Interest Paid	78,552
Increase (decrease) in accrued interest payable	165,585	$ 94,993
Transaction 1
Increase (decrease) in debt discount	71,760
Transaction 2
Increase (decrease) in debt discount	812,321
Change in Derivative Liabilities	812,321
Transaction 3 | Convertible debentures
Increase (decrease) in stockholder advances	(128,460)
Debt Instrument, Increase (Decrease), Net	128,460
Transaction 4
Increase (decrease) in debt discount	(47,839)
Change in Derivative Liabilities	(630,184)
Transaction 4 | Convertible debentures
Debt Instrument, Increase (Decrease), Net	(127,085)
Increase (decrease) in accrued interest payable	(11,547)
Transaction5Member | Convertible debentures
Debt Instrument, Increase (Decrease), Net	(1,947)
Increase (decrease) in accrued interest payable	(1,947)
Additional Paid-In Capital | Transaction 1
Beneficial conversion feature of convertible debt	71,760
Additional Paid-In Capital | Transaction 4
Common stock issued for conversion of debt, Value	293,035
Common Stock | Transaction 4
Common stock issued for conversion of debt, Value	$ 418,487

Note 15 - Contingencies (Detail

Note 15 - Contingencies (Details) - USD ($)	1 Months Ended
	Aug. 31, 2015	May. 31, 2015	Nov. 30, 2014	Jun. 30, 2015
Darling Capital LLC
Loss Contingency, Damages Sought, Value			$ 57,627
Gel Properties LLC
Original Principal Amount				$ 50,000
Litigation Settlement, Amount		$ 98,000
Loss Contingency, Settlement Agreement, Terms		The settlement agreement allows for three payments with the first payment due May 21, 2015 and the final payment of $33,000 due on August 13, 2015
LG Capital Funding LLC
Original Principal Amount				$ 186,158
Loss Contingency, Damages Awarded, Value	$ 296,086

Note 16 - Subsequent Events (De

Note 16 - Subsequent Events (Details) - Jun. 30, 2015 - USD ($)	Total
Debt Conversion, Original Debt, Amount	$ 711,522
Common Stock
Debt Conversion, Converted Instrument, Shares Issued	167,395,050
Subsequent Event
Original Principal Amount	$ 213,500
Subsequent Event | Principal
Debt Conversion, Original Debt, Amount	35,100
Subsequent Event | Interest
Debt Conversion, Original Debt, Amount	$ 2,926
Subsequent Event | Common Stock
Debt Conversion, Converted Instrument, Shares Issued	28,972,334
Subsequent Event | Convertible debentures
Original Principal Amount	$ 121,000